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Analyst Shaw Wu with Sterne Agee said in a note to investors on Tuesday that he has found in his checks with suppliers that Apple has reduced iPhone orders by between 20 and 25 percent from the 35.1 million units the company shipped in the March quarter.
If those numbers hold for the current June quarter, that would result in shipments of between 26 million and 28 million iPhones. That result would be below Wall Street consensus of between 30 million and 31 million.
Wu also noted that investors should factor in the 8.6 million iPhones Apple has in the channel inventory, with 2.6 million added in the most recent quarter. That channel inventory allowed the company to reach a supply-demand balance of between 4 and 6 weeks.
"From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe," Wu wrote. "It appears AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory."
But in the following September quarter, iPhone sales were 17.07 million, or 21 percent year over year growth, as Apple drew down inventories ahead of the iPhone 4S launch. That came in below expectations, as analysts predicted sales of around 20 million iPhones for the quarter.
Wu noted that Wall Street consensus last year "grossly underestimated the impact of a pause and inventory drawdown ahead of the iPhone 4S." He believes investor expectations should be drawn in for the June quarter as well as the following September quarter.
But while he doesn't expect a significant upside for iPhone sales in the coming quarters, Wu does believe the iPad has the potential to impress investors. Specifically, he has heard that Apple has increased build plans for its third-generation tablet.
Previously, shipments of the new iPad were held back by manufacturing issues with the new high-resolution Retina display. Earlier this month, estimated shipping times improved to between 3 and 5 business days as availability improved.
Wu said Retina display availability has been addressed by adding an additional supplier, beyond Samsung. He believes this will allow Apple to meet strong demand for the new iPad in the coming quarters, enabling the company to deliver upside compared to consensus investor expectations.